2016-19231

Federal Register, Volume 81 Issue 156 (Friday, August 12, 2016)

[Federal Register Volume 81, Number 156 (Friday, August 12, 2016)]

[Proposed Rules]

[Pages 53343-53348]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2016-19231]

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 3

RIN 3038-AE49

Chief Compliance Officer Annual Report Requirements for Futures

Commission Merchants, Swap Dealers, and Major Swap Participants;

Amendments to Filing Dates

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commodity Futures Trading Commission (``Commission'' or

``CFTC'') is proposing to amend certain provisions of its regulations

concerning Chief Compliance Officers (``Proposal''). The regulation

that is the subject of the Proposal addresses chief compliance officers

(``CCOs'') of futures commission merchants (``FCMs''), swap dealers

(``SDs''), and major swap participants (``MSPs'') (collectively,

``Registrants''). The proposed amendments would: Codify existing no-

action relief regarding the timing of when a Registrant must furnish

its CCO annual report to the Commission; clarify filing requirements

for Registrants located in a jurisdiction for which the Commission has

issued a comparability determination; and delegate to the Director of

the Division of Swap Dealer and Intermediary Oversight (``DSIO'')

authority to grant extensions to the CCO annual report filing deadline.

DATES: Comments must be received on or before September 12, 2016.

ADDRESSES: You may submit comments, identified by RIN 3038-AE49, by any

of the following methods:

CFTC Web site: http://comments.cftc.gov. Follow the

instructions for submitting comments through the Comments Online

process on the Web site.

Mail: Send to Christopher Kirkpatrick, Secretary of the

Commission, Commodity Futures Trading Commission, Three Lafayette

Centre, 1155 21st Street NW., Washington, DC 20581.

Hand Delivery/Courier: Same as Mail, above.

[[Page 53344]]

Federal eRulemaking Portal: http://www.regulations.gov.

Follow the instructions for submitting comments.

Please submit your comments using only one of these methods.

All comments must be submitted in English, or if not, accompanied

by an English translation. Comments will be posted as received to

http://www.cftc.gov. You should submit only information that you wish

to make available publicly. If you wish the Commission to consider

information that is exempt from disclosure under the Freedom of

Information Act (``FOIA''),\1\ a petition for confidential treatment of

the exempt information may be submitted according to the procedures set

forth in Sec. 145.9 of the Commission's regulations.\2\

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\1\ 5 U.S.C. 552.

\2\ 17 CFR 145.9. The Commission's regulations are found at 17

CFR Chapter I and can be accessed through the Commission's Web site

at www.cftc.gov.

_____________________________________-

The Commission reserves the right, but shall have no obligation, to

review, pre-screen, filter, redact, refuse or remove any or all of your

submission from www.cftc.gov that it may deem to be inappropriate for

publication, such as obscene language. All submissions that have been

redacted or removed that contain comments on the merits of the

rulemaking will be retained in the public comment file and will be

considered as required under the Administrative Procedure Act and other

applicable laws, and may be accessible under the FOIA.

FOR FURTHER INFORMATION CONTACT: Eileen Flaherty, Director, 202-418-

5326, [email protected]; Erik Remmler, Deputy Director, 202-418-7630,

[email protected]; Laura Gardy, Associate Director, 202-418-7645,

[email protected]; or Pamela M. Geraghty, Special Counsel, 202-418-5634,

[email protected], Division of Swap Dealer and Intermediary Oversight,

Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st

Street NW., Washington, DC 20581.

SUPPLEMENTARY INFORMATION:

I. Background

A. Commission Requirements for Submission of CCO Annual Reports

Section 4s(k)(3) of the Commodity Exchange Act (``CEA'') requires

CCOs for SDs and MSPs, in accordance with rules prescribed by the

Commission, to prepare and sign an annual report (``CCO Annual

Report'') describing, among other things, the SD's or MSP's compliance

with the CEA and CFTC regulations.\3\ CEA section 4s(k)(3)(B) requires

the CCO Annual Report to accompany each appropriate financial report of

the SD or MSP required to be furnished to the Commission.\4\ CEA

section 4d(d) requires CCOs of FCMs to ``perform such duties and

responsibilities'' as are established by Commission regulation or rules

of a registered futures association.\5\

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\3\ 7 U.S.C. 6s(k)(3)(A)(i). The CEA can be accessed through the

Commission's Web site.

\4\ 7 U.S.C. 6s(k)(3)(B)(i).

\5\ 7 U.S.C. 6d(d).

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Regulations 3.3(e) and (f) codify the duty to prepare and furnish

to the Commission a CCO Annual Report for all Registrants.\6\

Regulation 3.3(e) requires the CCO Annual Report to cover the most

recently completed fiscal year of the Registrant and specifies certain

reporting elements for Registrants in describing their compliance with

the CEA and Commission regulations. Regulation 3.3(f)(1) requires the

furnishing of the CCO Annual Report to the board or senior officer

prior to its submission to the Commission. Regulation 3.3(f)(2)

currently requires the CCO Annual Report to be furnished to the

Commission electronically not more than 60 days after a Registrant's

fiscal year-end.

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\6\ 17 CFR 3.3(e) and (f).

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B. Regulation 3.3(f)(2) Implementation Experience

Since the adoption of the 60-day filing requirement, DSIO has

continuously provided no-action relief for CCO Annual Reports submitted

to the Commission within 90 days of a Registrant's fiscal year-end.\7\

The no-action letter currently in effect, CFTC Staff Letter No. 15-15,

responds to a request for relief on behalf of FCM and SD firms, which

stated that having an additional 30 days to file the CCO Annual Report

allows each Registrant to conduct a more substantive and complete

review of its compliance program.\8\

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\7\ See CFTC Letter No. 13-84, Time-Limited No-Action Relief for

Futures Commission Merchants, Swap Dealers, and Major Swap

Participants from Compliance with the Timing Requirements of

Commission Regulation 3.3(f)(2) Relating to Annual Reports by Chief

Compliance Officers (Dec. 30, 2013), available at: http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/13-84.pdf; CFTC Letter No. 14-154, Time-Limited No-Action Relief for

Futures Commission Merchants, Swap Dealers, and Major Swap

Participants from Compliance with the Timing Requirements of

Commission Regulation 3.3(f)(2) Relating to Annual Reports by Chief

Compliance Officers (Dec. 22, 2014), available at: http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/14-154.pdf; and CFTC Letter No. 15-15, No-Action Relief for Futures

Commission Merchants, Swap Dealers, and Major Swap Participants from

Compliance with the Timing Requirements of Commission Regulation

3.3(f)(2) Relating to Annual Reports by Chief Compliance Officers

(Mar. 27, 2015), available at: http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/15-15.pdf (``CFTC Staff

Letter No. 15-15'').

\8\ FIA and ISDA Letter, Request for no-action relief concerning

certain requirements of CFTC Rule 3.3 relating to the timing of the

Annual Report (Mar. 10, 2015) (on file with the CFTC, available for

inspection and copying).

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Recently, the U.S. Securities and Exchange Commission (``SEC'')

adopted final rules corresponding to Regulation 3.3, and implementing a

provision of Title VII of the Dodd-Frank Act the text of which is

effectively identical to CEA section 4s(k)(3)(B).\9\ The SEC's

corresponding rule requires that the equivalent chief compliance

officer annual report for security-based swap dealers and major

security-based swap participants be submitted to the SEC within 30 days

following the deadline for filing each entity's annual financial

report.\10\

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\9\ Business Conduct Standards for Security-Based Swap Dealers

and Major Security-Based Swap Participants, 81 FR 29959 (May 13,

2016).

\10\ See id. at 30150.

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C. Application of Regulation 3.3(f)(2) to Entities Located in Certain

Non-U.S. Jurisdictions

In December 2013, the Commission issued comparability

determinations deeming an SD or MSP located in Canada, the European

Union, Hong Kong, Japan, or Switzerland (``Substituted Compliance

Registrants'') to be in compliance with Regulation 3.3(e) if it

complies with the applicable corresponding regulation in its home

jurisdiction.\11\ Specifically, a Substituted Compliance Registrant may

elect to furnish the Commission with the comparable annual reporting

information (hereinafter, ``Comparable Annual Report'') specified under

the standards of its home jurisdiction. However, the Commission did not

provide a comparability determination with respect to Regulation 3.3(f)

regarding the timing of when the

[[Page 53345]]

Comparable Annual Report must be furnished to the CFTC.\12\

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\11\ See Comparability Determination for Canada: Certain Entity-

Level Requirements, 78 FR 78839, 78843 (Dec. 27, 2013);

Comparability Determination for the European Union: Certain Entity-

Level Requirements, 78 FR 78923, 78928 (Dec. 27, 2013);

Comparability Determination for Hong Kong: Certain Entity-Level

Requirements, 78 FR 78852, 78856 (Dec. 27, 2013); Comparability

Determination for Japan: Certain Entity-Level Requirements, 78 FR

78910, 78915 (Dec. 27, 2013); Comparability Determination for

Switzerland: Certain Entity-Level Requirements, 78 FR 78899, 78903

(Dec. 27, 2013). It should be noted that while Australia was granted

a determination of comparability for some entity-level requirements,

it was not granted a determination of comparability with respect to

the requirements of Regulation 3.3(e). See Comparability

Determination for Australia: Certain Entity-Level Requirements, 78

FR 78864, 78869 (Dec. 27, 2013).

\12\ See note 11, supra.

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II. The Proposal

A Proposed Amendments to Regulation 3.3(f)(2)

The Commission is proposing to codify the current no-action relief

by amending Regulation 3.3(f)(2). The amendments would permit an FCM to

furnish its CCO Annual Report to the Commission not more than 30 days

after submission of the Form 1-FR-FCM \13\ or Financial Operational

Combined Uniform Single Report (``FOCUS Report''). The Proposal would

also permit an SD or MSP to furnish its CCO Annual Report to the

Commission not more than 90 days after its fiscal year-end until such

time as the Commission adopts and implements rules establishing the

time for filing the annual financial condition report required under

CEA section 4s(f). The Commission has proposed, but not yet adopted, a

financial condition report requirement comprised of an annual audited

financial report for SDs and MSPs.\14\ Once the Commission adopts and

implements a financial condition report rule, like FCMs, an SD or MSP

will have up to 30 days after the submission of its annual financial

condition report to submit the CCO Annual Report to the Commission.

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\13\ The proposed amendment also makes a technical correction in

Regulation 3.3(f)(2) by correcting the cross reference to the

Commission regulation that requires the filing of Form 1-FR-FCM to

Regulation 1.10(b)(1)(ii).

\14\ See Capital Requirements of Swap Dealers and Major Swap

Participants, 76 FR 27802, 27838 (proposed May 12, 2011).

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Regulation 3.3(e) requires a broad and detailed assessment of each

Registrant's compliance program over the preceding year as well as a

discussion of planned changes and remedial steps to be taken for non-

compliance matters. The Commission believes that providing up to 30

days after a Registrant's applicable financial reports are due would

provide Registrants an appropriate amount of time to complete the in-

depth review and analyses required by Regulation 3.3(e). As a policy

matter, the Commission recognizes that the periodic self-evaluation

that underlies each CCO Annual Report is a critical step in promoting

an active and robust compliance culture within firms.

In codifying the relief provided in CFTC Staff Letter No. 15-15,

the Commission is clarifying that the statutory requirement for an SD

or MSP's CCO Annual Report to ``accompany each appropriate financial

report'' allows for the CCO Annual Report to be furnished to the

Commission not more than 30 days after the submission of a Registrant's

annual financial report.\15\ The Commission recognizes the separate and

distinct nature and purposes of the two reports, and believes that

allowing Registrants to submit their CCO Annual Reports not more than

30 days after their financial reports are due satisfies the statutory

requirement that the CCO Annual Report ``accompany'' the other

financial report. This is also consistent with the SEC's approach in

its corresponding rule for delivery of chief compliance officer annual

reports by security-based swap dealers and major security-based swap

participants.\16\

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\15\ The Proposal would remove the obligation of Registrants to

file their CCO Annual Reports ``simultaneously'' with the applicable

FCM financial report or financial condition report.

\16\ In the adopting release, the SEC addresses the statutory

language that links the filing of the CCO Annual Report with the

filing of appropriate financial reports by stating, ``The Commission

is interpreting `accompany' in Section 15F(k)(3)(B)(i) to mean

follow within 30 days.'' 81 FR 29959, 30059, n.1238.

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B. Registrants Located in Substituted Compliance Jurisdictions

The Commission is also proposing to amend Regulation 3.3(f) to

address the timing of the filing requirement for Comparable Annual

Reports. If the requirements of the Substituted Compliance Registrant's

home jurisdiction identify a specific date by which the Comparable

Annual Reports must be completed, then the Commission is proposing that

Comparable Annual Reports may be furnished to the Commission

electronically up to 15 days after the date on which the Comparable

Annual Report must be completed.\17\ The additional 15 days would allow

time for translation of the report text into English. If the

Substituted Compliance Registrant's home jurisdiction does not

establish a specifically identifiable completion date, then the

Substituted Compliance Registrant must comply with the standard time

frames provided in Regulation 3.3(f), as amended. A specifically

identifiable completion date would be a date that can be clearly

identified such as a specific calendar date or a set number of days

after the Substituted Compliance Registrant's fiscal year-end. A home

jurisdiction requirement to complete the Comparable Annual Report only

if some event occurs or upon request, or which does not specify a

deadline, is not considered comparable to the Commission's annual

delivery requirement.

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\17\ While each of the jurisdictions that have been granted a

comparability determination with respect to Regulation 3.3(e)

requires Substituted Compliance Registrants to produce and complete

comparable annual reporting information, there is variation among

the foreign jurisdictions as to whether and/or when a Comparable

Annual Report must be furnished to the home regulator. Therefore,

the Commission is using the date on which the Comparable Annual

Report must be completed as the benchmark for determining when the

Comparable Annual Report must be furnished to the Commission.

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C. Proposed Amendments Regarding a Delegation From the Commission to

the Division

Pursuant to Regulation 3.3(f)(5), Registrants may request from the

Commission an extension of time to furnish their CCO Annual Reports if

the failure to timely furnish the report could not be avoided absent

``unreasonable effort or expense.'' The rule provides the Commission

with discretion in granting such extensions. To expedite review and

consideration of requests for extensions, the Commission is proposing

to delegate to the Director of DSIO, or such other employee(s) that the

Director may designate, the authority to grant extensions of time

subject to the same standard set forth in Regulation 3.3(f)(5). The

Commission notes that the exercise of such delegated authority would

need to be consistent with Regulation 3.3(f)(5) and therefore would be

limited to unique facts and circumstances that clearly demonstrate that

the inability to timely furnish the report to the Commission could not

have been eliminated absent unreasonable effort or expense. The

Commission believes that such delegation is prudent given that the

decision to provide an extension requires consideration of specific

facts and circumstances and often this consideration needs to occur

within a relatively short period of time. As is the case with existing

delegations to staff, the Commission would continue to reserve the

right to perform the functions described in Regulation 3.3(f)(5) itself

at any time.\18\

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\18\ In addition, notwithstanding any such delegation, in any

case in which a Commission employee delegated authority under this

section believes it is appropriate, the employee may submit the

question to the Commission for its consideration.

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The Commission requests comment on the appropriateness of the

proposed delegation and whether additional procedural detail is

necessary.

D. Request for Comment

The Commission seeks comments regarding the following matters:

Given the current filing requirements for the Form 1-FR-

FCM and FOCUS Reports, and the anticipated

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filing requirements for the financial condition report, is it

appropriate to permit FCMs, SDs, and MSPs an additional 30-days to

furnish their CCO Annual Report to the Commission? Are there any

practical or policy reasons for not permitting the additional 30 days?

Does codifying the relief granted in CFTC Staff Letter No.

15-15 sufficiently address Registrants' concerns?

Should the Commission provide any further clarification of

the requirements of Regulation 3.3(f) as they apply to entities located

in jurisdictions for which comparability determinations have been

issued?

III. Related Matters

A. Regulatory Flexibility Act

The Regulatory Flexibility Act \19\ (``RFA'') requires that

agencies consider whether the rules they propose will have a

significant economic impact on a substantial number of small entities

and, if so, provide a regulatory flexibility analysis reflecting the

impact. Section 3.3(f)(2), as proposed, amends the filing deadline for

CCO Annual Reports of FCMs, SDs, and MSPs and clarifies the filing

deadline for Comparable Annual Reports. The proposed amendments would

affect FCMs, SDs, and MSPs that are required to be registered with the

Commission. The Commission has previously established certain

definitions of ``small entities'' to be used in evaluating the impact

of its regulations on small entities in accordance with the RFA, and

has previously determined that FCMs, SDs, and MSPs are not small

entities for purposes of the RFA.\20\ Therefore, the Commission

believes that the amendments to Regulation 3.3 would not have a

significant economic impact on a substantial number of small entities.

Accordingly, the Chairman, on behalf of the Commission, hereby

certifies, pursuant to 5 U.S.C. 605(b), that the proposed amendments

will not have a significant economic impact on a substantial number of

small entities.

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\19\ 5 U.S.C. 601 et seq.

\20\ See Policy Statement and Establishment of Definitions of

``Small Entities'' for Purposes of the Regulatory Flexibility Act,

47 FR 18618, 18619 (Apr. 30, 1982) (FCMs); Further Definition of

``Swap Dealer,'' ``Security-Based Swap Dealer,'' ``Major Swap

Participant,'' ``Major Security-Based Swap Participant'' and

``Eligible Contract Participant,'' 77 FR 30596, 30701 (May 23, 2012)

(SDs and MSPs).

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B. Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (``PRA'') \21\ provides that a

federal agency may not conduct or sponsor, and a person is not required

to respond to, a collection of information unless it displays a

currently valid control number issued by the Office of Management and

Budget (``OMB''). The collection of information related to this

proposed rule is OMB control number 3038-0080--Annual Report for Chief

Compliance Officer of Registrants. The Commission believes that this

proposed rule will not impose any new information collection

requirements that require approval of OMB under the PRA. As a general

matter, the proposed rule would allow Registrants up to 90 days after

the end of their fiscal years, and certain Substituted Compliance

Registrants with up to 15 days after the date on which the Comparable

Annual Report must be completed under the requirements of their home

jurisdiction, to file the CCO Annual Report and Comparable Annual

Reports, respectively. As such, this proposed rule does not, by itself,

impose any new burden or any new information collection requirements in

addition to those that already exist in connection with the preparation

and delivery of the CCO Annual Report pursuant to part 3 of the

Commission's regulations.

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\21\ 44 U.S.C. 3501 et seq.

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C. Cost-Benefit Considerations

1. Background

As discussed above, the Commission is proposing amendments to the

filing requirements for CCO Annual Reports in Regulation 3.3 that

would: (1) Increase the amount of time registrants have to file their

CCO Annual Reports with the Commission; and (2) clarify the filing

requirements for Comparable Annual Reports. The baseline for this cost

and benefit consideration is existing Regulation 3.3. Although CFTC

Staff Letter No. 15-15, as discussed above, currently offers no-action

relief that is substantially similar to the relief that the proposed

amendments would grant Registrants, as a no-action letter, it only

represents the position of the issuing Division or Office and cannot

bind the Commission or other Commission staff.\22\ Consequently, the

Commission believes that CFTC Staff Letter No. 15-15 should not set or

affect the baseline against which the Commission considers the costs

and benefits of the proposal.

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\22\ See 17 CFR 140.99(a)(2). See also CFTC Staff Letter No. 15-

15 at 4.

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2. Costs

The Commission received no comments during the rulemaking process

for Regulation 3.3 regarding costs associated with the timing of the

filing deadline for the CCO Annual Report. The proposed amendment does

not change the report contents or require any additional actions to be

taken by Registrants. The additional 30 days (or up to 15 days after

the date on which a Comparable Annual Report must be completed under

applicable home jurisdiction standards that allow more time) provided

by the proposal lengthens the time before senior management or the

board of the Registrants and the Commission may receive the CCO Annual

Reports. The additional time to furnish the reports should not

materially impact regulatory oversight given that the purpose of the

reports is to provide a status update for the Registrant's compliance

activities over the course of the preceding fiscal year and planned

changes for the coming year. The reports generally do not serve to

address crisis situations for which immediacy is critical. Therefore,

the additional time allowed will not materially impact the usefulness

of the information in the reports.\23\ The Commission has no other

information available to it that would indicate that changing the

filing deadline would measurably change the cost to prepare the CCO

Annual Reports. Accordingly, the Commission preliminarily believes that

the proposal would not impose any additional costs on any other market

participants, the markets themselves, or the general public. The

Commission invites comment regarding the nature of, and the extent to

which, costs associated with the CCO Annual Reports could change as a

result of the adoption of the proposal and, to the extent they can be

quantified, monetary and other numerical estimates thereof.

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\23\ The CCO Annual Report must contain a description of

material non-compliance events that occurred over the review period.

However, reporting on those events in the CCO Annual Report provides

transparency regarding the effectiveness of the implementation of

the compliance program over the preceding year for management and

the CFTC.

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3. Benefits

The Commission believes that the proposal would provide relief for

Registrants from time pressures in preparing and filing their CCO

Annual Reports. The additional time provided will allow Registrants to

more carefully complete their internal processes used to develop the

broad variety of information needed for the reports resulting in more

accurate and complete reports. The Commission invites comment regarding

the nature and extent of these and any other benefits that could result

from adoption of the proposal--including benefits to other market

participants, the market itself, or the general public--and, to the

extent they can be quantified, monetary and other numerical estimates

thereof.

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4. Section 15(a) Factors

Section 15(a) of the CEA requires the Commission to consider the

costs and benefits of its actions before promulgating a regulation

under the CEA or issuing certain orders.\24\ Section 15(a) further

specifies that the costs and benefits shall be evaluated in light of

five broad areas of market and public concern: (1) Protection of market

participants and the public; (2) efficiency, competitiveness, and

financial integrity of futures markets; (3) price discovery; (4) sound

risk management practices; and (5) other public interest

considerations. The Commission considers the costs and benefits

resulting from its discretionary determinations with respect to the

section 15(a) factors.

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\24\ 7 U.S.C. 19(a).

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a. Protection of Market Participants and the Public

The Commission recognizes that there are trade-offs between

reducing regulatory burdens and ensuring that the Commission has

sufficient, timely information to fulfill its regulatory mission. The

proposed amendments to Regulation 3.3 are intended to reduce some of

the regulatory burdens on Registrants. While the amendment will delay

the time by which the Commission will receive the CCO Annual Reports,

the delay is relatively short given that the information in the reports

looks back over the entire year-long reporting period and identifies

planned improvements for the coming year. Accordingly, the Commission

preliminarily believes that the short delay will not affect the

protection of market participants and the public.

b. Efficiency, Competitiveness, and Financial Integrity of Markets

The Commission believes that the proposed amendments to Regulation

3.3 could improve allocational efficiency for participants in the

market by reducing the burden of preparing the CCO Annual Report in a

shorter time-frame, thereby allowing them to allocate compliance

resources more efficiently over the report preparation period. The

Commission preliminarily believes that the proposed amendments to

Regulation 3.3 will not have any market efficiency, competitiveness, or

market integrity impacts because the reports address internal

compliance programs of each Registrant and are not publicly available.

c. Price Discovery

The Commission preliminarily believes that the proposed amendments

to Regulation 3.3 would not impact on price discovery. Given the fact

that the proposed amendments affect only the timing of when the CCO

Annual Reports are filed with the Commission and the CCO Annual Reports

generally would not contain trade information or be available to the

public, the proposed amendments would not affect price discovery.

d. Sound Risk Management Practices

The Commission preliminarily believes that the proposed amendments

would not have a meaningful effect on the risk management practices of

Registrants. While the CCO Annual Reports may discuss certain risk

management aspects related to the compliance programs of the

Registrants, the proposal would only amend the timing of delivery of

the reports to the Commission, not the contents of the reports. As

described above under subsection 4.a, the short delay in delivery of

the reports provided for by the proposal is not significant given the

nature of the information included in the report and allowing

additional time to prepare the CCO Annual Reports might allow the

Registrants to prepare better reports that more effectively address the

information contained therein.

e. Other Public Interest Considerations

The Commission has not identified any other public interest

considerations for this rulemaking.

5. Request for Comment

The Commission invites comment on all aspects of its preliminary

consideration of the costs and benefits associated with the proposal

and the five factors the Commission is required to consider under CEA

section 15(a). In addressing these areas and any other aspect of the

Commission's preliminary cost-benefit considerations, the Commission

encourages commenters to submit any data or other information they may

have quantifying and/or qualifying the costs and benefits of the

proposal.

List of Subjects in 17 CFR Part 3

Administrative practice and procedure, Brokers, Commodity futures,

Major swap participants, Reporting and recordkeeping requirements, Swap

dealers.

For the reasons stated in the preamble, the Commodity Futures

Trading Commission proposes to amend 17 CFR part 3 as follows:

PART 3--REGISTRATION

0

1. The authority citation for part 3 is revised to read as follows:

Authority: 5 U.S.C. 552, 552b; 7 U.S.C. 1a, 2, 6a, 6b, 6b-1, 6c,

6d, 6e, 6f, 6g, 6h, 6i, 6k, 6m, 6n, 6o, 6p, 6s, 8, 9, 9a, 12, 12a,

13b, 13c, 16a, 18, 19, 21, 23, as amended by Title VII of the Dodd-

Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-

203, 124 Stat. 1376 (Jul. 21, 2010).

0

2. Amend Sec. 3.3 as follows:

0

a. Revise paragraph (f)(2); and

0

b. Add paragraph (h).

The revision and addition to read as follows:

Sec. 3.3 Chief compliance officer.

* * * * *

(f) * * *

(2)(i) Except as provided in paragraph (f)(2)(ii) of this section,

the annual report shall be furnished electronically to the Commission

not more than 30 days after the submission of Form 1-FR-FCM, as

required under Sec. 1.10(b)(1)(ii) of this chapter, the Financial and

Operational Combined Uniform Single Report, as required under Sec.

1.10(h) of this chapter, or the financial condition report, as required

under section 4s(f) of the Act, as applicable. Until such time as the

Commission adopts and implements a regulation establishing the time for

filing the financial condition report, a swap dealer or major swap

participant shall furnish the annual report electronically to the

Commission not more than 90 days after the end of its fiscal year.

(ii) The annual report of a swap dealer or major swap participant

that is eligible to comply with a substituted compliance regime for

paragraph (e) of this section pursuant to a comparability determination

of the Commission may be furnished to the Commission electronically up

to 15 days after the date on which the comparable annual report must be

completed under the requirements of the applicable substituted

compliance regime. If the substituted compliance regime does not

specify a date by which the comparable annual report must be completed,

then the annual report shall be furnished to the Commission by the date

specified in paragraph (f)(2)(i) of this section.

* * * * *

(h) Delegation of Authority. The Commission hereby delegates to the

Director of the Division of Swap Dealer and Intermediary Oversight, or

such other employee or employees as the Director may designate from

time to time, the authority to grant extensions of time, as set forth

in paragraph (f)(5) of this section. Notwithstanding such

[[Page 53348]]

delegation, in any case in which a Commission employee delegated

authority under this paragraph believes it appropriate, he or she may

submit to the Commission for its consideration the question of whether

an extension of time should be granted. The delegation of authority in

this paragraph shall not prohibit the Commission, at its election, from

exercising the authority set forth in paragraph (f)(5) of this section.

Issued in Washington, DC, on August 8, 2016, by the Commission.

Christopher J. Kirkpatrick,

Secretary of the Commission.

Note: The following appendix will not appear in the Code of

Federal Regulations.

Appendix to Chief Compliance Officer Annual Report Requirements for

Futures Commission Merchants, Swap Dealers, and Major Swap

Participants; Amendments to Filing Dates--Commission Voting Summary

On this matter, Chairman Massad and Commissioners Bowen and

Giancarlo voted in the affirmative. No Commissioner voted in the

negative.

[FR Doc. 2016-19231 Filed 8-11-16; 8:45 am]

BILLING CODE 6351-01-P

 

Last Updated: August 12, 2016